How to read candlestick chart trends
Doji Candlestick Chart Pattern
A Doji is quite often found at the bottom and top of trends and thus is considered as a sign of possible reversal of price direction, but the Doji can be viewed as a continuation pattern as well. A Doji is formed when the opening price and the closing price are equal.
A long-legged Doji, often called a "Rickshaw Man" is the same as a Doji, except the upper and lower shadows are much longer than the regular Doji formation. The creation of the Doji pattern illustrates why the Doji represents such indecision.
Introduction to Chart Patterns [ChartSchool]
After the open, bulls push prices higher only for prices to be forex trix indicator download and pushed lower by the bears. However, bears are unable to keep prices lower, and bulls then push prices asian forex session times to the opening price.
Of course, a How to read candlestick chart trends could be formed by prices moving lower first and then higher second, nevertheless, either way, the market closes back where the day started.
In a Doji pattern, the market explores its options both upward and downward, but cannot commit either way. After a long uptrend, this indecision manifest by the How to read candlestick chart trends could be viewed as a time to exit one's position, or at least scale back. Similarly, after a long downtrend, like the one shown above of General Electric stock, reducing one's position size or exiting completely could be an intelligent move.
Understanding Candlestick Charts for BeginnersIt is important to emphasize that the Doji pattern does not mean reversal, it means indecision. Doji's are often found during periods of resting after a significant move higher or lower; the market, after resting, then continues on its way.
Nevertheless, a Doji pattern could be interpreted as a sign that a prior trend is losing its strength, and taking some profits might be well advised. Home Technical Analysis Candlestick Charts Classic Charts Options. Trading Disclaimer Privacy Policy Contact Us. Doji Doji Doji Candlestick Pattern Intra-day Doji Examples.